Proposed settlement for residents in the Flint water crisis is now $641million - and the state plans to borrow $600million
The proposed settlement in the Flint water crisis where residents were harmed by lead-tainted water is now $641million - and the state plans to borrow $600million for the payout.
The city of Flint was plagued with a severe water crisis in 2014 when water from the Flint River scraped lead from aging pipes and fixtures and contaminated the water supply and exposed over 100,000 residents to elevated lead levels.
The contamination came after workers followed state environmental officials' advice not to use anti-corrosive additives, but without those treatments, the water supply became poisonous.
Settlement documents filed in US District Court on Tuesday detail how the state, the city of Flint, McLaren Regional Medical Center and Rowe Professional Services plan to pay out their portions of the deal.
It also reveals that Michigan intends to borrow $600million through a settlement entity which will obtain a loan from the Michigan Strategic Fund, according to Michigan Live.
The settlement entity would use the state’s commitment to make annual payments over 30 years in order to obtain the loan.
The proposed settlement in the Flint water crisis where residents were harmed by lead-tainted water is now $641million - and the state plans to borrow $600million for the payout
Flint residents hold up bottles of contaminated water while speaking to Congress about the city's water crisis in February 2016. The water was first contaminated in 2014
But the state legislature needs to approve those loan plans.
State Senate Minority Leader Jim Ananich, a Democrat of Flint, said the bills to allow for the loan could be introduced and acted upon in December and leaders on both sides of the political aisle have already been briefed on the plan.
'I’m hopeful we can do it during the lame duck session,' he said Wednesday.
'There’s good reason to end this chapter,' meaning settling the water crisis without going to trial.
The Michigan Strategic Fund was created in 1984 and has the authority to promote economic development and create jobs in the state.
In order for the loan to happen the Michigan Legislature needs to agree to the plan and has to amend the Michigan Strategic Fund Act to allow for borrowing, according to the settlement documents.
The settlement documents filed Tuesday say the state will pay $5million into a settlement fund within 15 calendar days after the federal court enters preliminary approval orders. That will kick start the process where residents can register their claims.
The rest of the state’s settlement would be paid with loan proceeds by March 1 or 180 calendar days after U.S. District Judge Judith Levy approves of the settlement.
A water storage container used by Cleophus Mooney and his family for clean drinking water in his home in Flint, Michigan pictured on October 22. Residents are still working through the water crisis in addition to the COVID-19 pandemic
Gov. Gretchen Whitmer first announced the proposed $600million settlement by the state in August.
'This settlement agreement is just one of the many ways we will continue showing our support for the city and residents of Flint,' Whitmer said in a statement.
'The details of the proposal that have been presented to the judge are an important step forward and we are committed to helping the residents of Flint participate in this process as we all work together towards the brighter future that Flint deserves.'
McLaren and Rowe also agreed to settle now rather than litigate. Michigan Attorney General Dana Nessel announced Flint's portion of the settlement is $20 million.
McLaren is providing $20 million and Rowe, which acted as the city’s engineer from July 2002 until June 30, 2016, is providing $1.25 million.
Court-appointed counsel Corey Stern says Flint residents will have 60 days to register to participate in the settlement.
Volunteers help distribute water at Asbury United Methodist Help Center in Flint, Michigan on October 20. On this morning blocks and blocks of cars waited near a church in the eastern part of the Midwestern city to receive value packs of bottled water. These giveaways still happen three days a week, some six years after residents began complaining that a decision to supply the city from the Flint River was making them sick
Those that register will then have 120 days to produce documents supporting their claims.
If accepted by the court, the settlement would excuse the state of Michigan, the city of Flint, McLaren and Rowe from pending civil litigation related to the water crisis.
So far about 24,000 residents of Flint have signed retainers with attorneys to represent them in lawsuits against the city, state, and other parties involved in the crisis.
Lawsuits would continue against other defendants that did not agree to settle, including the federal government and other consultants who worked with the city on water issues.
Authorities say Flint's water now meets federal safety guidelines, outperforming comparable cities. But residents remain unconvinced after the turmoil and opt for bottled water instead.